Neuroscientists use maps of people's brains to predict reasoning ability - <AUTHOR> http://www.wired.com/2015/10/scientists-can-now-predict-intelligence-brain-activity/ <comment><USER2> I wouldn't consider a measurement of a brain's mapping any different than the measurement of a person's height. Someone taller probably has a better chance of being a good basketball player, but there are plenty of basketball players who are excellent and not of exceptional height.

The article makes it seem as though there are absolute measurements being made of certain elements in the brain, but it's almost more than certain to be pattern matching or machine learning that is being done. You find some people that are good at doing X and have them take a test. Then you take new people, have them perform the same test, and if their scans are similar to the scans of the initial people, then you say these new people are pre-disposed to do X well.

<comment><USER3> I agree with you, though I'm not sure if height is even the best metaphor: our brains are remarkably changeable based on how we use them, so a better comparison might be measuring an athlete's muscle mass in different parts of the body.

<comment><USER4> > our brains are remarkably changeable based on how we use them, so a better > comparison might be measuring an athlete's muscle mass in different parts of > the body.

Yes, I immediately thought of the motor skills experiments[1] that raised brain density in the relevant regions.

I think the first half of the article was too sensational and brave new world oriented given that the explanation for the differences in regional brain densities and contentedness would mostly be from the home environment of a young child.

It was a bit like predicting the availability of hearing tests will lead us to build classrooms of super hearers instead of intervene to address hearing issues before children fall behind.

[1] [http://www.ncbi.nlm.nih.gov/pubmed/18648501](http://www.ncbi.nlm.nih.gov/pubmed/18648501)

</comment></comment></comment><comment><USER5> I'd like to direct curious readers to my favorite story by Isaac Asimov, called "Profession": [http://www.inf.ufpr.br/renato/profession.html](http://www.inf.ufpr.br/renato/profession.html)

It deals with pretty much exactly this topic -- in the story, peoples' professions are determined by brain scans (as in the study), and the requisite professional knowledge is then loaded via a similar device (which seems much further off). The story explores some of the ethical/societal implications of being "exceptional" in terms of brain structure. It's an incredible piece of fiction, and it has stuck with me over years and years even when the appeal of stories like "The Last Question" have somewhat worn off for me.

<comment><USER6> Spoiler and a question in rot13

1.V nz obgurerq sbe guvf vf irel htyl-qhpxyvat-vfu

2.Jul QB gurl pnyy gurz Bylzcvpf?

</comment></comment><comment><AUTHOR> I wonder how future research will be affected by this. Say every child gets their connectome mapped when they start school to get placed in the best type of learning environment for them (auditory, visual etc.). Presumably, within the data of that same scan, there will also be information about whether that kid is violent etc. This will simply not be part of the analysis for learning environment matching. But, the information will be there as soon as the research to figure out what types of connectome patterns indicate a pre- disposition to X is peer reviewed and published.

So, do we choose not to conduct research on certain subjects so that this process can be safely used for more benign purposes? Or, do we have really strict rules about what types of analyses can be done with a given scan? With attending rules about deleting scan data after it has been analysed for the intended purpose? Or something else entirely?

<comment><USER7> > Say every child gets their connectome mapped when they start school to get > placed in the best type of learning environment for them (auditory, visual > etc.).

There is no reason whatsoever to do this. Aside from the issue that 'multiple intelligences' has not held up and has been abandoned, if you want to measure their intelligence, it's unlikely that brain scans will anytime in the foreseeable future outperform simply giving a child a 10-minute pencil-and- paper IQ test (and highly unlikely that scans will ever be cheaper or easier than a regular IQ test).

<comment><USER8> While I largely agree with you, I have to take issue with a couple of you points.

> outperform simply giving a child a 10-minute pencil-and-paper IQ test (and > highly unlikely that scans will ever be cheaper or easier than a regular IQ > test).

For children the test takes, "48–65 minutes to administer" and requires more than pencil-and-paper [1].

> There is no reason whatsoever to do this.

More importantly, I think doing a regular comparison of the standard IQ test results with this new scanning method could be a good way to account for test bias [2].

[1] [https://en.wikipedia.org/wiki/Wechsler_Intelligence_Scale_fo...](https://en.wikipedia.org/wiki/Wechsler_Intelligence_Scale_for_Children)

[2] [https://en.wikipedia.org/wiki/Intelligence_quotient#Test_bia...](https://en.wikipedia.org/wiki/Intelligence_quotient#Test_bias)

<comment><USER7> > For children the test takes, "48–65 minutes to administer" and requires more > than pencil-and-paper [1].

For the full-scale WAIS, perhaps. But you can still extract a good estimate from the subscales, and needless to say, the WAIS is far from the only IQ test out there.

> I think doing a regular comparison of the standard IQ test results with this > new scanning method could be a good way to account for test bias [2].

Huh? The brain scans are being validated using the existing IQ tests in the first place, and if one doesn't accept all the existing literature on the unbiasedness of current IQ tests (where the concepts are not too difficult - for example, I think many laymen could get through and understand most of _Bias in Mental Testing_, Jensen 1980 [http://emilkirkegaard.dk/en/wp- content/uploads/Bias-in-Menta...](http://emilkirkegaard.dk/en/wp- content/uploads/Bias-in-Mental-Testing-Arthur-R.-Jensen.pdf) explaining what biases there would be, how one would test for them, and why IQ tests are unbiased), one is not going to accept the results of the infinitely more complicated & subtler brain imaging pipeline where there's so many details & variability that they had a pretty serious replicability problem for a while, especially when they just yield the same results that the original IQ tests would have.

</comment></comment></comment></comment><comment><USER9> tldr;

"It's not wrong to say there are weird ethical implications to this," Finn says, "but we're still a long way from doing this with enough accuracy to apply in the real world." Neuroscience will be waiting for its sorting hat for a while yet.

<comment><USER10> '"In this study, the researchers predicted how well people would do on a cognitive test by analyzing fMRI scans of 126 subjects in the Human Connectome Project, a five-year initiative to map how areas of the human brain communicate with each other. The subjects performed motor, memory, and intelligence tests, including a pattern completion test that measured abstract reasoning—what neuroscientists call fluid intelligence.

Their connectomes, it turned out, had a lot to do with how well they scored. ...A strong connection between the frontal and parietal lobes, especially, meant a high fluid intelligence score.'

This is an interesting result as well, that connection between different areas of the brain predict abstract reasoning ability.

</comment></comment><comment><USER11> Great xkcd addressing this issue [http://xkcd.com/1588/](http://xkcd.com/1588/)

<comment><USER12> That xkcd is spot on.

Alan Kay has said that "point of view is worth 80 IQ points".

I don't see how observing internal brain structure is going to reflect the benefit from points of view held, even in the slightest. There could very well be an inverse correlation, in which people having above-average natural ability tend to brute-force their way through problems that could have been avoided entirely with better choices. Just as Gordon Bell said: "The cheapest, fastest, and most reliable components are those that aren't there".

You just don't hear about people getting through life, but failing to understand the notion of, say, "not stepping out onto the crosswalk when the street is still busy". Your environment is extrinsic to your internal brain structure, and you encode information about your environment against your own internal system of thought, regardless of its architecture. It's not like people who happen to be "naturally better spatial thinkers" can somehow do a better job at recalling their own beliefs.

</comment></comment><comment><USER13> Brains rewire all the time. It's our number 1 feature, adaptability. A good musician can become a good sharpshooter, a good programmer can excel at architectural engineering.

Being a good writer - what does that mean? Someone who has had some real, interesting experiences may be a better writer than someone who is wired to tell good stories.

Physical features also matter - a lot. Your brain may be perfect for a nuclear physicist, but you're no good if you're gonna have a stroke or heart attack suddenly on the job.

And, of course, nurture over nature - people's background, how they grew up, how they were educated from their first year to now, matters way more than genetics.

If you don't/can't account for all of that (and more) when deciding a person's future, then keep this science to yourself.

<comment> minority-one On the other hand, there's a consensus in the scientific community that IQ is the best predictor of outcome in life, despite the factors you've mentioned.

In other words, all being taken into consideration, it turns out IQ has an incredible predicting power regarding the lives of individuals. It's actually better at predicting life outcome than any other factor.

> And, of course, nurture over nature [...] matters way more than genetics.

That is the opposite of what current research into IQ has shown so far. If you go on YouTube, you can find interviews with Charles Murray, and that will help you understand this better.

> A good musician can become a good sharpshooter, a good programmer can excel > at architectural engineering.

Yes, but it's not likely to happen (or you'd have oodles of examples). Predicting is all about what's more likely, and in this capacity, IQ has proven over and over again to be the single best predictor.

<comment><USER14> I'm doubtful of that consensus. Is it a real measured thing, or just 'common knowledge' which adds up to urban legend.

I'd understood that the best predictor of success at a job is Conscientiousness. More than test scores, economic class, fancy schools.

</comment></comment></comment><comment><USER15> But brains form new connections all the time, and some activities result in lots of new connections. So this isn't a static thing that is enitirely inherited.

</comment><comment><USER16> "Some brains are better than others at certain things, simply because of the way they're wired. And now, scientists are closer to being able to determine precisely which brains those are, and how they got that way ... Intelligence research is relatively young."

No, it's not. The Eugenic movement started the quest for the "better" brain nearly a century and a half ago, and we all know how that turned out...

<comment> minority-one The movement for the better brain started much before half a century ago.

If you study Jewish history you will find out they have been doing this all along. For instance, as a very literate culture, they would encourage the less capable of learning to leave the faith, much like a Rumspringa without end. This had the effect of culling the less intelligent, which was an effect they understood and seeked purposefully. On the other side of the coin, as opposed to Christianity which discourages its representatives (priests) from reproducing, Rabbis were encouraged to have prolific offspring on account of their being the most educated people, and the community engineering so that there will be more intelligent Jews (sons of cultured Rabbis) than unintelligent ones (those who are encouraged to give up on faith studies).

But yes, evil Germans and their eugenics, carry on.

</comment></comment><comment><USER17> When you see the brutal average that people in the "connectome" does for brain signals/images, you will not believe in this line of research too much ...

</comment><comment><USER18> One step closer to physically realizing Newcomb's problem?

</comment><comment><USER19> did they do their due diligence in preventing overfitting? I suppose I should read the paper and see for myself</comment>


Minecraft Used in City Planning - <AUTHOR> http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.idg.se%2F2.1085%2F1.471850%2Fnytt-sigtuna-tar-form-med-minecraft&act=url

<comment><AUTHOR> Original: [http://www.idg.se/2.1085/1.471850/nytt-sigtuna-tar-form- med-...](http://www.idg.se/2.1085/1.471850/nytt-sigtuna-tar-form-med- minecraft)

<comment><AUTHOR> I don't mean to sound like I'm whining, but what was the reason to downvote the original article that is the source for the submission?</comment></comment>


What is it like to be a Product Manager at Dropbox? - <AUTHOR> http://www.quora.com/What-is-it-like-to-be-a-Product-Manager-at-Dropbox/answers/14460156?share=1

<comment><USER2> Lots of recent bad new from Dropbox. Doesn't sound good for one of YC's first startups.</comment>


Neil Armstrong's Code - <AUTHOR> http://www.washingtonpost.com/wp-srv/national/longterm/space/armstrong1.htm <comment><AUTHOR> I have spent more time than most thinking about Armstrong, Project Apollo and his legacy in the long lens of history. This misunderstanding became much clearer when the program ended and all of the Apollo astronauts faced an existential crisis and a deep depression following their crowning achievement. Their lives - the lives of some of the smartest and most driven people to ever live - peaked in their 40's and that was it.

It's hard to imagine a different perception of Apollo than the one we have right now, but at the time people realized it would be historic, but they didn't grasp the magnitude of their achievement. This fact was especially true for the astronauts involved. No one - not even NASA - realized the obvious at the time; the astronauts were never going to be human beings after their moon walks. They were going to be such and such who walked on the moon. And in a way - in the eyes of history - every act following that point was essentially a footnote. After all, how the heck do you top walking on the moon?

This burden was further magnified for Armstrong. Most of us forget the depth of his fame. Carl Sagan wrote about an anecdote where an anthropologist told him that a previously uncontacted tribe (or rather assumed to be uncontacted tribe) asked about Apollo 11 and if it was true if human beings had indeed walked on the moon. Try to put yourself in his shoes and lift the weight he carried. Try to imagine being Neil Armstrong and waking up every single day with the weight that _every_ literate child in the world will learn your name until humanity itself ceases to be. He became The First Man - not a person who was allowed to make mistakes. No, that was too undignified for The First Man.

And he hated every second of it. He refused to sign autographs. He stopped going out into public. Stopped giving interviews. (IIRC, the last one he gave was to an accountant [https://www.theatlantic.com/national/archive/2012/05/neil- ar...](https://www.theatlantic.com/national/archive/2012/05/neil-armstrong- grants-rare-interview-accountant/327730/)) And chose to live his life as a recluse.

But perhaps, this tendency is why he was chosen in the first place. Deke Slayton and the other administrators, wisely, knew that he would be a better First Man than someone like Aldrin, who can be described in the most charitable of terms as a fame whore. [http://www.americaspace.com/?p=24709](http://www.americaspace.com/?p=24709)

And so one of the most shy and cerebral men of his generation was chosen to be a "living monument." And perhaps a monument to the American era as a whole. As of writing, Armstrong is already more famous than Alexander the Great - <USER2> whom at least three major languages have literally defined the word "great." (even now his name isn't Alexander of Macedonia, but Alexander _the_ Great.) And Alexander himself will be forgotten before Armstrong is. He is without a doubt, the most famous human to ever exist. And long after the American empire ceases to be, he will still be remembered as an example of what we achieved. Barring a calamity, he will be remembered for all time as long as human beings are alive.

It was a very heavy burden, but Armstrong bore it with grace. Perhaps with greater grace than Washington himself, who exemplified the ideal of doing your service and saying goodbye to retire to a farm.

Beyond his technical mind. I am in awe of him as a human being. The more I learn about him, the more I admire him.</comment>


C++ Code for Quantum Many Body Solutions with Artificial Neural Networks - <AUTHOR> https://github.com/HaoZeke/Q_ANN <comment> photon-torpedo It's probably helpful to read the paper for which this code was written:

Journal publication: [http://science.sciencemag.org/content/355/6325/602](http://science.sciencemag.org/content/355/6325/602)

ArXiv copy: [https://arxiv.org/abs/1606.02318](https://arxiv.org/abs/1606.02318)

<comment><AUTHOR> Yup, I didn't know there was an ArXiv version too...

That can go on the repo too I guess...</comment></comment>


Message boxes are dead - <AUTHOR> http://www.diovo.com/?p=150

<comment><USER2> This guy has a cheapskate attitude. Have him show a way to delete something without warning that I will not regret later...

All he talks about is message boxes that inform you of something. And yes, I want some message boxes to make me think. I do not want to gloss over deleting all the files I just selected in my FTP client, for example.

Every time I have multiple tabs open in both IE and FireFox and I mistakenly hit the button to close the whole browser when I intended just one tab, I am grateful for the confirmation box.

<comment><USER3> "Have him show a way to delete something without warning that I will not regret later..."

An undo feature _might_ be a better alternative in _specific_ cases, if it's feasible to implement and it's not too dramatic an operation.

<comment><USER2> For me, with deletion, in all cases it's better. Given that it's sometimes really hard to undelete (or technically impossible, as in the case of an FTP client, for example), I'd rather get the confirmation box before the deletion is done.

<comment><USER4> Not in all cases. GMail deletes without prompting, but adds a notification about what happened, with an 'Undo' link.

You may be right about cases where it is technically impossible to undelete, but I think in most cases it's preferable to make undeleting easier than to show message boxes.

</comment></comment></comment></comment><comment><USER5> Not entirely. But most message boxes acted as modal interfaces for non-modal tasks, making them incredible annoying. Good riddance. However, message boxes still have a place when dealing with the rare modal task.

Back in 1995, Alan Cooper mentioned this trend in _About Face_ (his book on UI design, still a good read today).

</comment><comment><USER6> Can't really agree with the examples as provided.

[Information in c:\danger\wipeout_test.reg has been successfully entered into the registry as a result of your accidentally hitting Enter in explorer.exe]

"It gives the information without annoying me. Very good."

</comment><comment><USER7> The best time to use a message box is to confirm a action that may have that may have consequences. For example deleting something.

Besides that, a web app should never use them.</comment>


Pumped hydro could make Australia run on renewables alone within 20 years - <AUTHOR> http://www.abc.net.au/news/2017-09-21/pumped-hydro-renewable-energy-sites-australia-anu-research/8966530 <comment><USER2> The sad reality is that our government thinks only in timespans less than an election cycle. Any large-scale national infrastructure project is basically a non-starter now, the Liberals trashed the NBN and they will trash anything else that threatens their neo-conservative ideology.</comment>


Sites are starting to go black in memorial of Jim Weirich - <AUTHOR>

Add others in the comments <comment><AUTHOR> [http://www.neo.com/](http://www.neo.com/)

[http://columbusrb.com/](http://columbusrb.com/)

[http://www.fvrb.org](http://www.fvrb.org)</comment>


What would you do if a company recently rejected you contacted you for an offer? - <AUTHOR> So a company I recently interviewed with rejected me because they chose another candidate (No automatic rejection email. Both the recruiter and the manager emailed me saying how difficult it was to decide who to hire and all that in a polite way) but a few weeks later the manager emailed me back saying another candidate rejected the acceptance and asked whether I'm still looking for a job (also politely).
However, I am currently in the middle of the interviewing process with another bigger company and would like to finish the process (currently second technical phone screen).
How should I handle this situation?
Should I tell them I want to work for them but still would like to finish the interview first and then ask for a written offer via email and tell them to wait for a few weeks?
Thank you! <comment><USER2> I would just say yes, that you are still job hunting and that you would love to resume talking to them about the job. Perhaps, thank them for being honest with you and polite in how they handled turning you down. Tell them that there are no hard feelings. Ask them what the next steps are now and finally explain that you are currently still interviewing with other companies (no need to name names or the stages you are in. You are just stating the obvious).

No need to pressure them in any other way until they tell you what they see as the next step. Do not assume you have any leverage with them. They are probably also still looking. This is a chance to show them that you are a class act.

Don't look at this in any other way except as an opportunity. Yes, you can bring up the fact that another company is interested, but not at this time. Set the hook with class and an obvious interest in their company.

<comment><AUTHOR> Thank you so much for your advice! It really strikes a balance. No doubt I had a mix of positive and negative feelings about this at first but hey an opportunity is an opportunity. Thanks once again!

<comment><USER3> Forget the negative feelings because you don't know enough to justify them.

Maybe they didn't have the budget to hire you, and the other guy was cheaper. Now the other guy has flaked and the CEO has taken a 10% pay cut to hire you. I have been the CEO taking the cut to stretch for a candidate before.

You don't know what's going on behind the scenes, so be classy and polite, they may be stretching for you

</comment></comment></comment><comment><USER4> Hey, yes, you should totally tell them you're waiting to hear from another company and will gladly get back to them as soon as possible.

That might even push them to step up their offer.

<comment><AUTHOR> Thank you!

The manager's email just asks me whether I'm still looking for a job and whether I would want to work for them, but without actually attaching an official offer in the email yet.

If I follow what you said, should I also ask for an official offer right now and tell them I will get back to them asap? Something like this: "Yes, I would love to work at XYZ but I'm currently waiting to hear from company JFK and will gladly get back to you as soon as possible, at the meantime, could you please provide an official offer via email?"

What do you think?

Thank you once again.

<comment><USER5> That sounds ok (although you're not necessarily obligated to mention who JFK is). Also, it is possible that you might want to tell JFK you've just gotten an offer, and want to know how long it would be before you hear a decision. Respectfully and politely, of course.

Frankly, the fact that XYZ actually was honest with you about how things went puts them above average. They could have left you on the line without any news at all until they saw if the other candidate worked out.

<comment><AUTHOR> Thank you! That's what I thought too. They could have kept me waiting while the other candidate was deciding. I do feel a bit offended at first because this is basically telling me I am the second or even the third choice...Anyway, I feel like continuing the interview with the other company seems like a better move than straight up accepting this job.

<comment><USER5> I get why you would feel this way, but perhaps the other person was something amazing. I'm sure you would admit that you are not the absolute #1 programmer in the world, and without knowing who the other candidate is, you don't know what it says about their regard for you. Maybe they just had two amazing candidates. But, I understand why one would feel that way.

</comment></comment></comment></comment></comment><comment><USER6> I would just think of it as an implementation snag in the hiring process, and don't take it personally at all -- the company is just trying to do their best to get the best candidate, and maybe the one they tried to hire over you simply looks better on paper or some other minor reason. The fact that they came back to you means you were a close second and they know they'd be happy with either of you.

Use it as leverage / bargaining / option just like you would any other offer that is in hand or coming, and as far as your decision / communication you can proceed as if the rejection never happened.

Detail: I am currently interviewing and considering offers, and was rejected by one company in a similar manner -- if they did what your company did, I would follow the advice I gave :-]

</comment><comment><USER7> Tell them what you just told us - you continued your search, and while interested, need to finish your ongoing interview processes before making a decision. Any organisations that cannot accept that isn't one you want to work for anyway. Likewise, if there is a problem communicating transparently with your future boss, they aren't someone you want to work for.

The only thing from your post that I wouldn't say is "wait a few weeks". If they are holding up a hiring process to hear back from you, it is fair to make it happen quickly. And when I have been in similar situations, everyone who was interested in me was willing to speed up the process to make decisions possible.

</comment><comment><USER8> Well there are a number of ways you could handle the situation:

1\. Ask if you could think on it for a bit to buy yourself some time to finish your other job interview and then make a pros and cons list of working for each company to decide.

2\. Accept the job from the smaller company but keep doing the interview (Who said you can't have two jobs?) and then just work at both companies.

3\. Accept the job from the smaller company and end the interview.

4\. Decline the offer from the smaller company and prepare for the interview in the meantime.

5\. Accept the job from the smaller company and keep going with the interview process and if you get accepted you could use that as leverage for a higher position in the smaller company.

I don't know your exact situation but hopefully this helps.</comment>


Cold-Fingered iPhone Users Switch to Sausage-Based Styluses - <AUTHOR> http://www.popsci.com/technology/article/2010-02/meat-iphone-sausage-stylus

<comment><AUTHOR> "It seems that the sausages, electrostatically speaking, are close approximations of the human finger."</comment>


Show HN: A collection of recursive CSS specimens - <AUTHOR> https://recurss.github.io <comment><USER2> Playing about with some of these crashed my Firefox tab. Seems interesting, but snot something I would personally deploy.

</comment><comment><USER3> Neat little idea. Brings me back to the mid-2000s when CSS playgrounds/css- garden/css edge were all a thing.

<comment><AUTHOR> I used to love those. And css is so much more powerful today too!

I should really throw together a simple playground page though. The website itself is just a jekyll wrapper for a page with

...

, but if you just want to play around, the number of steps required to get it setup and running the first time is a bit crazy

<comment><AUTHOR> Threw together a basic playground: [https://recurss.github.io/playground/](https://recurss.github.io/playground/)

<comment><USER3> This is great! Love it.</comment></comment></comment></comment>


The No-Lose Bet for Banks in IPOs - <AUTHOR> http://www.wsj.com/articles/the-no-lose-bet-for-banks-in-ipos-1450402900 <comment><USER2> Let us not forget that they can also "short" the stock and elect to call underwriter "greenshoe" in scenarios where the stock falls in price. They can make money in so many different ways

</comment><comment><USER3> The greatest shock to my idea of fairness in the world was when I learned that banks could deposit money in the federal reserve and get a guaranteed by law interest rate of 6 percent. Heads, market's good and banks lend money and make money. Tails, market's bad, banks put money in the fed and make money.

Not surprised that it is a similar heads-i-win-tails-you-lose situation with IPOs. The House always wins.

<comment><USER4> That's not how it works. The current rate isn't 6% either.

If Banks loan money to the Federal Reserve, they are unable to pull the money out for X number of days. If they need the money __now __(ie: Liquidity Crisis of 2007), they can go bankrupt despite having a lot of cash stored elsewhere.

So no, it isn't a risk free practice. Managing liquidity (ie: loaning money to the public in the form of Home Mortgages or Car Loans, or taking in deposits and depositing it into investments like the Fed baseline rate to make money 6-months or 1-year from now) is the __very point __of a bank. If you think its easy, you can go ahead and form your own bank.

<comment><USER5> > If you think its easy, you can go ahead and form your own bank.

Given regulatory hurdles (which may be well justified by the social consequences of unrestricted banking, but that's beside the point) that's not really a valid challenge. Whether or not its easy to _run_ a bank, its not at all easy to _start_ one, legally.

<comment><USER4> > that's not really a valid challenge

The number of small community banks and credit unions in the US is huge. There are over 381 Registered Credit Unions in New York __alone __. There are easily tens of thousands of small banks across this country.

[http://www.cuna.org/Research-And-Strategy/Credit-Union- Data-...](http://www.cuna.org/Research-And-Strategy/Credit-Union-Data-And- Statistics/State-Fact-Sheets/)

No really, if you think its a valid or easy business model, then start your own. Literally tens of thousands of others have already done so.

<comment><USER5> > The number of small community banks and credit unions in the US is huge.

Which is completely irrelevant to the issue of the regulatory difficulty of starting a _new_ one _today_.

> There are easily tens of thousands of small banks across this country.

No, there aren't, and the number is dropping over time.

[http://mercatus.org/publication/small-banks- numbers-2000-201...](http://mercatus.org/publication/small-banks- numbers-2000-2014)</comment></comment></comment></comment></comment>


What do we really know about the effectiveness of digital advertising? - <AUTHOR> https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising/13228924500-22d5fd24 <comment><USER2> Great to see an article like this. This subject is almost suspiciously under- researched by journalists. There 's definitely something rotten in the promises that internet advertising has become somehow more effective. If that were true, wouldn't businesses notice? Wouldn't they spend a bigger part of their revenue on ads ? Wouldn't that return even bigger ROIs? Yet businesses spend roughly the same for over a century in ads, and it's not like the 2000s-2010s were the period of massive growth in consumer spending.

We need more of this research, please, because advertising is a huge deal for the health of the internet, despite its vilification. And it doesn't begin and end with FB+Google

Also: It would be nice if people who comment here and work for Google or FB declared their conflict of interest

<comment><USER3> > because advertising is a huge deal for the health of the internet, despite > its vilification

[citation needed]

I am of the opinion that internet would be a much saner place if advertisement was purely and simply banned.

<comment><USER4> Then how would we be able to browse for free?

<comment><USER5> The free internet can be split into two groups, websites operated for non- commercial reasons and websites operated for commercial reasons.

The group that operate under commercial reasons can also be split into two groups, those whose primary revenue is from advertisement and those whose primary revenue is from non-advertisement sources. Hacker news for example belong to the later and gain revenue from investing.

To answer the question on how would the internet exist without the subgroup of people who operate website for the commercial reasons of advertisement is difficult as each of those groups also compete with each other, but we can be pretty sure that the other groups wound increase in size.

<comment><USER6> HN has ads: startups advertising for employees. But I don't know how YC thinks of the effect of HN.

<comment><USER7> It has ads, but those are not commercial. Only indirectly.

<comment><USER6> What do you mean that the ads aren't commercial?

<comment><USER7> The companies don't pay for the ads (that's my understanding). It's not dissimilar from an artist mentioning a patron. It's more an endorsement than an ad, it's not exactly the same thing as AdWords.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER8> From the article:

> Marketers are often most successful at marketing their own marketing.

I've seen this play out at places I've worked. After raising a funding round, marketing sold the leadership on letting them burn the lion's share of it, even though launching new marketing campaigns was never on the list of reasons we initially went out to raise money.

<comment><USER9> I think that's a self-preservation tactic for many that often backfires.

Most non-marketing management people want _immediate_ and _huge_ results... which are both hard to quantify and impossible to get without overspending or having an insanely lucky idea that goes viral.

Naturally this leads to asking for a bigger budget and promising bigger results, then KPIs aren't met for X, Y, Z reasons, then they're forced to justify the spend, then they either get more budget or get fired and the cycle repeats. Marketing has too many intangibles, so marketers always feel a need to justify themselves out of fear of being an easy target.

<comment><USER10> I'd be nervous to work for a company where one of the co-founders isn't a marketer.

Marketing is usually one of the biggest line items for a business.

When your marketing team has little incentive to actually deliver, they're likely to ask for a ton of money only to add impressive things to their resumez, not really to deliver on their promises to the business.

If a founder is in charge of marketing, s/he's got a lot of reasons to deliver: founder's equity.

<comment><USER11> > I'd be nervous to work for a company where one of the co-founders isn't a > marketer.

I'd be nervous if there were a co-founder who is a marketer (unless it's literally a marketing startup).

Take a look at some of the hottest tech companies right now (recent IPO, FAANG, pre-IPO, YC darlings). Would you be really afraid to work for a FAANG, or hot recent IPOed companies like Zoom or PagerDuty, or pre-IPO companies like Stripe or Flexport because of the (co)founders' non-marketing background?

</comment></comment></comment></comment><comment><USER12> > a Super Bowl ad cost three million dollars. Why? Because that's how much it > cost. What does it yield? Who knows.

This article is awesome. In my free time I'm building an advertising platform that topic matches ads off the content of the web pages. No tracking of users.

I'm hoping to allow people to host and run their own all inclusive self contained advertising platform for just a licensing fee. I also have a way to beat adblockers that I'm afraid of bringing to light since I only want it tied to my own companies completely non tracking and ethical ads.

Hope it's not a bubble! Though first I have to finish the work and get a few customers so it's not like I can't pivot if it is.

<comment><USER13> > _I also have a way to beat adblockers that I 'm afraid of bringing to light_

Proxying ads through as first-party content?

If you really are invested in making them work ethically, consider these ground rules: [https://bostik.iki.fi/aivoituksia/random/no- stalking.html](https://bostik.iki.fi/aivoituksia/random/no-stalking.html)

<comment><USER14> I find, as a consumer, I disagree with the text only requirement.

Videos are certainly off limits as a nuisance. However images convey a lot of information very quickly, and can be visually "skipped" in a way text cannot.

When presented an ad for protein powder alongside my workout diets article, I want to see what it looks like. The presentation of the product is an important factor in whether or not I pursue it.

It has to be remembered that advertising is a three way relationship, and all three stand to gain (presuming no scam). This is more complex than financials - displaying an advert leads to a bi-directional association in the consumers mind between the entity being advertised and the entity advertising it. It is beneficial to advertise products that have Brand values similar to yours (or ones you want to appropriate).

In all cases it can benefit the user to be advertised to as a means of discovery.

Many of us forget (or do not realise) that there are (and historically were a lot more) "papers" proudly proclaiming themselves "advertisers". People willingly read pages of adverts in order to discover products and services.

Anyway. Keep the image, it's worth 1000 words.

<comment><USER15> >This is more complex than financials - displaying an advert leads to a bi- directional association in the consumers mind between the entity being advertised and the entity advertising it. It is beneficial to advertise products that have Brand values similar to yours (or ones you want to appropriate).

I agree, and I think that's part of why I disagree so hard with you on the primacy of images.

I mean, i'm not saying that a preference for text vs. a preference for pictures is objectively right or wrong, it's just a really good example of your aforementioned alignment of brand values between the content provider, the brand doing the selling, and the consumer. pictures are a way of associating your brand with values, but eschewing the (possibly extraneous) extra data in that picture, you are also associating your brand with a set of values.

I am also a consumer of protein powder... but you are _way_ better off appealing to me with text. Ingredients, (tell me what the stuff is made of, and don't add any sweeteners) purity (Test for heavy metals or the like!) and then price are probably the attributes you want to bring forward, if you are trying to sell me a protein powder, approximately in that order. If you instead show a nice picture of the can or have a model preparing some in your ad, I'm going to see that, at best, as an irrelevant distraction. (again, I'm not saying those are the objectively most important attributes of a protein powder, but if you want my protein powder budget, that's how you get it; At a cultural level, the more I feel you focus on the things I care about and the less you focus on things I see as irrelevancies, the more I feel you align with my values.)

I mean, I'm not saying that pictures are good or bad in general, just that advertising with pictures and advertising with text have _very different_ cultural connotations, and that advertising with text only can be a striking alignment with a consumer's values.

<comment><USER16> i.e. you want to see the facets you'd be looking for when choosing a product to purchase.

For many products and people that will just be the visual appeal, and advertisers target their widest audience.

This is a case where tracking can actually be seen in a positive light - I too think I would be more likely to convert if I saw a datasheet as an ad, but that's definitely not majority. At the same time, obviously fashion ads will convert better as images, in almost everyone.

<comment><USER15> >For many products and people that will just be the visual appeal, and advertisers target their widest audience.

I... think this is usually unwise. If you attempt to appeal to everyone, you appeal to no one. I personally think one of my advantages when I ran prgmr.com was a consistent brand? At the very least, it was very recognizable. (I don't run it anymore, and I'm not claiming to have done a great job when I did. But I can point out several mistakes I made where I would have gotten... big at least by my standards if I had zigged rather than zagged. I think I did a memorable, if not a good job at branding, and "just get my name right" is... well, it's halfway there.)

Personally, I think that if you want to appeal to different markets, you should use a different brand with a different customer-facing layer, even if in the bowels, the product is produced on the same equipment.

>This is a case where tracking can actually be seen in a positive light

I'm not sure? I mean, I think that the connection between the advertiser/brand values is important, and you destroy some of that if you tailor your advertising to the consumer... if different people get different views of the same brand, well, it's really different brands.

(Also, the decision to track/not track is a brand value decision in and of itself- a rather big one, if you can credibly communicate that to your customers.)

<comment><USER16> Attempting to appeal to everyone by serving a different ad based on tracking is precisely what I meant, but I'm thinking more from a platform standpoint than as a brand. An ideal marketplace would prefer to sell a spot to brands who advertise in a way that appeals to the buyer.

</comment></comment></comment></comment></comment></comment></comment><comment><USER17> A very easy way to break this argument is to not look at huge known companies like eBay and Amazon, but brand new companies 1-2 years old that have grown almost entirely by online ads. Eventually word of mouth kicks in, but there are plenty of smart operators that built their entire brand and revenue off of ads.

Works best in online direct to consumer brands.

<comment><USER18> Reliably someone comes along every few months to question digital ads. I always come back to analyses of incrementality as the real proof.

Take an audience of X people. Divide them in two. Show ads to your test group, don't show to control. Watch your business grow and gauge the lift between the two audiences.

The companies that know how to advertise at scale do this constantly and can gauge the real effect of their ad dollars. Facebook, Google and others make these tests possible in their platforms, while other software suites such as Impact Altitude and VisualIQ allow you to do this kind of analysis and testing as well.

In the end, most of it proves out to be incremental. There are notable exceptions of course, but when are there not?

<comment><USER19> How do you separate "people who haven't seen an ad" into a group in Google analytics? I don't believe "organic" source does that, because that means they weren't targeted by the ad in the first place, creating a bias.

<comment><USER20> Advertisers have many tools to measure "ghost ads" aka "people who haven't seen an ad but would otherwise have qualified for all your target criteria". See [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2620078](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2620078) as an example.

<comment><USER19> That's of course possible to measure in theory. I meant it as a response to "Facebook, Google and others make these tests possible in their platforms" since I haven't seen it exposed as an explicit option on either.

<comment><USER20> Then you haven't been talking to the right ad sales teams. Google and Facebook have entire product options built around this specific concept. You can run a "ghost ads" test on Google for as little as $20k in ad spend; it's relatively accessible even for smaller players.

</comment></comment></comment></comment></comment></comment><comment><USER21> This is a rather unimpressive article. Yes, brand advertising is a disaster, just like it has always been. But to say that all digital advertising has unknown ROI is ridiculous. Digital _direct response_ advertising allows very accurate ROI calculations. (Admittedly, a lot of advertisers are not applying the tools to their advantage. They call that the "Google stupid tax". Ditto these days on Facebook.) And direct response advertising is nothing new. Mail order guys were cleaning up by running early (expensive!) experiments that showed if they were going to go out of business. Oddly enough, when you have skin in the game, you follow the money much more closely. Who knew? The fact that golf course brand advertising deals don't pay off is not news. They never have much.

The bad news for digital direct response advertising is that the platforms are starting to remove the knobs that actually let people determine and optimize their ROI. Google is in the process of actively removing ad functionality and data that has, historically, been crucial to ad profitability. Google claims their machine learning can see much more of the data available, so "trust us." Perry Marshall, Google ads guru, has recently held several webinars about "Why Google is Objectively Evil."[0] Not pretty.

[0] [https://www.perrymarshall.com/60-second/gama- replay/](https://www.perrymarshall.com/60-second/gama-replay/)

<comment><USER22> Hi this is the author of the article. You're just making the exact mistake this article is about: you assume people who click on your ad and then buy something, bought something BECAUSE of your ad.

From the article: "Suppose Luigi's Pizzeria hires three teenagers to hand out coupons to passersby. After a few weeks of flyering, one of the three turns out to be a marketing genius. Customers keep showing up with coupons distributed by this particular kid. The other two can't make any sense of it: how does he do it? When they ask him, he explains: "I stand in the waiting area of the pizzeria."

It's plain to see that junior's no marketing whiz. Pizzerias do not attract more customers by giving coupons to people already planning to order a quattro stagioni five minutes from now."

It's the same in online marketing, you often target people who are searching for say a pair of shoes. People who are searching for shoes have way higher baseline probabilities of ending up buying a pair of Nikes, whether you show them a Nike ad or not. So if you do not correct for this 'selection bias', you have no idea what your ad did.

The research I describe in the article clearly shows (and please look it up yourself, the links are all there) that selection bias is HUGE, and that it's hard to know ROI, because true advertising effects are tiny if you measure them in an experiment.

<comment><USER23> The effects may be low but what is the alternative? You suggest there's a digital advertising bubble but to have a bubble with the assumption it will burst, you need to show that advertisers can achieve a better return by doing something else.

There's no digital marketing bubble more than there is a traditional advertising bubble. There IS however a conflict of interest in advertising that's caused by the agency which performs the advertising being tasked with showing a return on investment.

<comment><USER22> I agree that advertising as a whole might be a bubble. In fact, my next piece is about TV advertising which is arguably worse. See: [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3273476](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3273476)

I do think it's more accepted in traditional advertising that we just don't know how well it works. In digital advertising there is a grand illusion of measurement.

<comment><USER24> Hey Jesse,

I spent 6 years working in ad-tech, and I was researching the incrementality effect of ads, selection bias and stuff like that for last 3 years. I want to let you know that your article is good. Online advertising is not a bubble, but your article perfectly explains why it is much harder than it seems.

<comment><USER25> The thing about bubbles is that nobody knows they exist. So an insider such as yourself saying, "there is no bubble," is actually strong evidence of said bubble. Necessary but not sufficient.

<comment><USER26> This isn't really the case. Bubbles usually have plenty of people claiming they are bubbles, and people on the inside privately acknowledging it.

In online advertising there are few people on the inside who think that non- brand advertising is a bubble. It just works too well, in too many places, and too many people are making money using it. It's reliable and effective, and those just aren't attributes associated with bubbles.

Yeah, attributing everything to the last-click isn't the best measurement in the world. But as pointed out elsewhere there are techniques to avoid it.

And there are enough direct-to-consumer brands which launch on Instagram and do _nothing_ else to be able to see how effective it is.

</comment></comment></comment></comment></comment></comment></comment><comment><USER27> What I notice is that internet advertisment is pretty selective, I dont know about effective... If your interests happen to diverge from mainstream just that bit enough, you can end up in a pretty much ad-free zone. I happen to watch a lot of conference recordings on YouTube, and most conferences dont monetize their channel (yet). But thats not the end of the story. Stay away from mainstream, and you get complete ad-free shows. Take Joe Rogan for instance. The people he hosts are largely pretty interesting, but the way he does controversial topics pretty much led YouTube to demonetize him. Which, for the consumer, is a blessing. Because you get 3h talkshows without a single bit of advertisment. Or ARTE, which is a german/french coop television provider. They have very interesting content, but a policy of not enoying with ads. Which makes their YouTube channel even more worthwhile subscribing to. I could go on, the pattern seems to be the same. To be honest, the more cheesy a program is, the more likely it is that you will be flooded with ads.

<comment><USER28> So, how _is_ Rogan funded? And what is he advertising? His Patreon? Product placement? Ideological placement?

<comment><USER29> There are over 5 minutes of ads at the start of every Joe Rogan podcast, as well as others throughout. One analyst suggests Rogan has acheived a net worth over $1bn based on the number of downloads & estimated advertising revenue based on those figures: [http://www.insideradio.com/podcastnewsdaily/joe- rogan-podcas...](http://www.insideradio.com/podcastnewsdaily/joe-rogan- podcast-billionaire-and-poster-boy-for-subscription- podcasts/article_05317272-cffc-11e9-be43-2f6532b4be9c.html)

<comment><USER27> As written above, I know about the intro ads, but they are only being done in the podcast version. The youtube versions of the same talkshows dont have a single bit of advertisment for me, neither at the beginning nor in the middle.

</comment></comment></comment></comment><comment><USER30> I've always wondered about those adverts for the website I'm searching for. If I type its name into Google, I'm already 100% committed to going there. Sometimes I click the advert (it generally depends how much I like the company).

The other aspect of online ads that strikes me as ingenious but probably not sustainable is the way Google inflates the auction system with fake money. Anyone who's run a website will have received a letter offering hundreds of dollars of free advertising with Google. Of course, it's an auction so the presence of that money just drives up the cost for everyone. Google wins every time!

<comment><USER31> There was a post about this recently. They need to buy the ad to keep their competitor from being the first result. [https://www.seroundtable.com/basecamp-google- ad-28161.html](https://www.seroundtable.com/basecamp-google-ad-28161.html)

<comment><USER32> Well, at least there is no law allowing ISPs to serve their site more slowly unless they pay a ransom (I mean business professional tier).

</comment></comment></comment><comment><USER33> It's seemed pretty obvious for a good decade that, if a bubble were going to pop, it would probably be related to advertising. Because if online advertising falls off a cliff, that hits two of the big tech employers directly. And you can be sure there would be major secondary effects on all the companies whose plan is to more or less never make money but be acquired.

</comment><comment><USER34> Overstated.

This article assumes that: \- All online advertising is Google search \- That brand search advertising is representative of the entire industry

There are plenty of companies making double-digit ROAS (return over ad spend), especially direct response advertisers.

<comment><USER22> Hi, I'm the author of the article, and I don't assume all online advertising is Google search. I also cite research on display advertising (meta-study of 432 display experiments on Google): [https://www.ssrn.com/abstract=2701578](https://www.ssrn.com/abstract=2701578) And on Facebook advertising: [https://www.kellogg.northwestern.edu/faculty/gordon_b/files/...](https://www.kellogg.northwestern.edu/faculty/gordon_b/files/fb_comparison.pdf)

The problem with all online advertising is that there are huge selection effects, which are hard to correct for using conventional statistical methods. So you need to do experiments. And when economists do experiment, they find that advertising effects are so small that they are hard to measure.

<comment><USER35> There is a selection bias in these studies as well -- that you are focusing on large, already established brands that have good brand recall and people who had intent to purchase there anyways.

For smaller companies that are just starting out, it's relatively impossible to have prior intent when people don't know who you are or what you offer. There are a number of companies who started with nothing and grew their business via online ads and this seems like a giant blind spot in the article as well as the studies that you mentioned.

<comment><USER36> > There are a number of companies who started with nothing and grew their > business via online ads and this seems like a giant blind spot in the > article as well as the studies that you mentioned.

But is that number statistically significant? some do, how many others tried the same route and failed, how many grew without it, etc

</comment></comment></comment></comment><comment><USER37> "New"? Pinboard-guy Maciej Cegłowski has been harping on this for years now: [https://idlewords.com/2015/11/the_advertising_bubble.htm](https://idlewords.com/2015/11/the_advertising_bubble.htm)

</comment><comment><USER38> Just as Google won the search engine wars by helping people find what they are looking for, the e-commerce winners will be the companies that help people find what they want to buy (reliably and with confidence).

Retail companies are blind to just what a shit-show their websites are (a lot of them even have ads _in_ their online store). Any company that solves this problem for their sector will win it, and this is good news for techies as every company can and should have a unique solution.

<comment><USER39> Amazon more or less won didn't it?

It doesn't have total domination of ecommerce but frankly it'd run into anti- trust issues if it did. No company is going to do ecommerce bigger than amazon without getting broken up so yeah... amazon.

<comment><USER40> Moving more and more away from Amazon. If I especially like a product or company, I'll see if it costs about the same to buy direct and do that. I've found that lots of companies actually have better deals on their site or offer a coupon.

<comment><USER41> > I've found that lots of companies actually have better deals on their site > or offer a coupon.

If coupons and discounts are the best the competition have to offer, then Amazon doesn't have too much to worry about.

<comment><USER42> For me, avoiding the counterfeit gamble is a good reason to step outside of Amazon if there is any other reasonable option.

</comment></comment></comment></comment></comment><comment><USER43> I do not work for google facebook or any other internet company. I do however purchase online ads for my law firm. I also tried turning off the ads for a few weeks to disastrous results.

I can say the big problem in the examples in this article is the keyword selection. For example ebay advertising the word ebay to customers who are googling the word ebay is probably fruitless for the most part. Those people were already looking for ebay and would find it with or without the ad.

However if you are a lesser known online auction and you use the keyword "internet auction" or something similar, it would probably help.

This article, to me, seems to be more about the importance of experimenting and critically evaluating the data rather than an actual indictment on online marketing. With online marketing there is no clear answer: what keyword you bid on, how you target, how you write your ad copies, how your competitors are behaving all come into play. It's difficult for anyone to parse through those factor and really come out definitively as to whether online marketing is effective or ineffective in general. We can only do the smaller measurements and see if our particular ads are effective for our particular business, which in the end is all any of us who buy ads really care about.

</comment><comment> ta-49173 I've had the impression that "online advertising" has been rife with fraud since its inception.

Using cloud services to cheaply farm the clicks reported by the ads seems obvious.

That we collectively turn a blind eye to it is the most disheartening part.

</comment><comment><USER44> How many people here have purchased something solely because they saw an advertisement for it, or how many people do you know who have done that?

I can't recall myself ever seeing an ad for something I did not already know of and then spending money on it.

Whenever I have found something that I didn't already know and then purchased it, it has been because of word-of-mouth (including online comments), reviews or recommendations/features on digital stores like Steam, GOG, App Store etc.

<comment><USER45> Me neither. However HN is an echo chamber of intelligent people who aren't going to sway their opinion or purchases based on ads. It's harder for me to visualize but the majority of people out there pay attention to ads and even will convince them to purchase.

When I go to the movies, people will laugh or agree at the most stupid ads. I don't think most people educate themselves or their children about not engaging in such content. It's why those morning shows that are really just ads in disguise are still airing today.

</comment></comment><comment><USER46> > "What frustrates me is there's a bit of magical thinking here," Johnson > says. "As if Cambridge Analytica has hacked our brains so that we're going > to be like lemmings and jump off cliffs. As if we are powerless."

Probably not, but nevertheless their efforts to polarise thinking and support the formation of echo chambers have been quite successful. While selection effect has indeed been disregarded often, in the case of CA it actually amplified the outcome.

<comment><USER2> its also very difficult to measure anything about political ads, so better keep the research to commercial ads for which data can be found

</comment></comment><comment><USER47> > A former Facebook engineer once said (and he's been quoted a thousand times > over): "The best minds of my generation are thinking about how to make > people click on ads." I spoke to some of those best minds: economists > employed and formerly employed by the most powerful companies in Silicon > Valley...

Not to be a jerk, but almost none of the best minds in SV or of my generation are economists.

<comment><USER48> If you are a millennial or younger, I respectfully disagree. The "best minds" have been sought out to build out the new infrastructure in the service of the new railroad tycoons.

</comment></comment><comment><USER49> I'm still dubious about the implication that digital advertisement is fundamentally broken.

My issue is that the article doesn't demonstrate selection effects dominating over advertising effects for companies with no major brand identity. The examples cited to back the case - eBay (which is huge), "large" retailers in the case of Facebook ads, "major U.S. retailers and brokerages with millions of customers" per Lewis and Rao 2015 - are all established companies that have already received substantial presence. Where are the experiments that demonstrate selection effects dominating over advertising effects for companies with no pre-existing brand identity e.g. The Correspondent (sorry, I couldn't resist :P)?

Second issue: the article demonstrates convincingly that brand-keyword ads are broken, which is great. But at the same time brand-keyword ads are not (to my knowledge as a former engineer at an SEO company, so it could be imperfect) the primary kind of keyword ads. A brand-keyword ad is when someone types in "eBay" and you get paid eBay links - but the majority of keyword ads (again, this is from memory) are targeted keyword ads e.g. someone types in "fur coat" and Macy pays Google to put a link to its "fur coats" pages. Equally interesting, multiple companies can pay for the same targeted keywords, meaning you can have multiple links pointing off to different sites on the same page.

The pizzeria analogy explains why brand-keyword ads make no sense monetarily (someone searching for your brand specifically will find you anyway), but it falls apart for the targeted keyword space, where people are searching by items but not by brand.

Given that much of SEO and digital marketing are target-based rather than brand-based, I'm not sold yet on the ineffectiveness of digital advertising overall.

</comment><comment><USER50> So 16 years ago it has been shown that advertising for your own brand name is worthless?

Yet still in 2019, when I google for "Amazon" I see an Amazon ad?

Color me skeptical.

I doubt the marketing guys at the worlds biggest companies are _that_ out of touch with reality.

Would love to know why they do it though.

<comment><USER51> I think your answer is in your comment. Why would the digital marketing guys at Amazon say that their advertising doesn't work and their budget should be cut? They want a bigger budget with more responsibility, not less!

<comment><USER52> Unlike most companies, Amazon can easily track ad display or click to purchase. While they still can't establish causality (you might have bought it even without the ad), it's still fairly easy for them to calculate if the ads are worth it.

<comment><USER53> When you have Amazon's scale, you can easily do geo-controlled lift studies like the ones mentioned in the articles to get a pretty good estimate of the incremental ROAS.

</comment></comment></comment></comment><comment><USER23> Sounds similar to this other bubble where we blindly pay software engineers to create and modify software but we don't know how much revenue those software features, refactors or bug fixes generate, if anything at all. /s

<comment><USER54> You are very correct. But what I always wonder. How long can this system perpetuate?

</comment></comment><comment><USER55> The biggest ruse is Facebook convincing marketeers and agencies alike that three seconds counts as a video view. They justify this by saying people don't want to watch videos are attention deficit.

The truth is that very few people want to watch an ad. But if there's a strong enough value exchange with the consumer, they will. Just make effective content that's emotive, funny or offers utility.

Creatively, the impact of this is clients wanting ALL the messaging in the first three seconds of video content, which often causes the consumer to skip the rest of the content anyway.

</comment><comment><USER56> I worked for an ad network for 6 years. The level of fraud in online advertising is staggering. It might work for some but a lot of it goes to waste, not even seen by humans.

</comment><comment><USER57> Coming from the other end (after someone clicked an ad), I got to say: ads work well. The metric used @work is: cost of sale.

The merchant pays for each click on the ad that is redirected to his product page. What seems like a recipe for wasting incredible amounts of money on an army of click bots is working - because the merchant defines a target cost of sale for those clicks, meaning for example he expects a sale worth 100$ when spending 10$ on ads (a cost of sale of 10%).

And the merchant will set a budget and won't repeat/continue a campaign beyond those costs, so it is in the ad publisher's best interest to deliver real paying customers instead of an army of bots.

Cost of sale is of course different for each product category - clothes and perfume have huge margins (so the merchant may be willing to pay 30% of the final sale price for advertising costs), computer parts less so.

In the case of ebay and amazon and other large retailers it's common to not pay per click but for a percentage of an order's total volume (x% of shopping basket's value once an order is placed). In that case, we have to trust the retailer to deliver correct sales data to us.

<comment><USER58> But doesn't this ignore the selection effect discussed in the article? IE to use your numbers say you get a $100 sale for every $10 spent on ads. And say your profit margin (outside of ads) on that sale is 20%, so you earn $20-$10 = $10 in profit.

However, what if 3/4 of the people who clicked on your ads would have found you anyway, through organic search results or other means? Then that $10 spend only actually generated $5 in net income before ads, or a $5 loss after the cost of the ads.

It's tough to say what that number is without doing some testing, but the point is that you can't simply treat all the business coming in via ads as attributable to the ad spend.

<comment><USER57> True, you could very well cannibalize your own advertising efforts. I think that may be a problem for brands who already advertise themselves. For example, I agree it makes no sense for Ebay to place an ad for the search term "ebay" if they are already the first search result. If you have a well known brand, you will have a lot of people who will search you out directly. In that case it's a matter of running campaigns and see what sticks - if you spend 10% of your budget on an agency's ad campaign, and very few new customers turn up, you may be wasting money.

But if you have a small to medium online shop, I think it makes sense to have someone run ad campaigns for you on as many domains as possible - and pay only for high quality traffic. If you re-sell shoes from Nike, you will have a very hard time getting a click from someone who would have bought at your shop anyway, because your competitors will pay for Google PLA and other ad campaigns and anyone who is looking for a good offer will run into their ads.

<comment><USER59> Since you're taking the example of Ebay. When Ebay doesn't pay for ads, the top paid result Amazon most of the time. When Amazon also runs out of ad money, it's a less reputable site taking the top site, sometimes a plain scam.

</comment></comment></comment></comment><comment><USER60> I kept waiting for the other shoe to drop on the #fitgirl/yoga pants anecdote. It seems plausible that such a targeted campaign could be more effective than the standard "dump a bunch of money in this set of adwords" crap. At least one executive was really certain about it. The way this section is written, it seems like we're making sport of that guy without actually knowing that he is wrong.

</comment><comment><USER61> I wonder how much under-the-radar advertising happens here.

Good karma user: meaningful context to the thread "But now I just use $product"

Immediate response: "Yeah $product is amazing - but here's something related and a different to the gist"

The whole thing is an aside but it's in context and make sense in the flow. That kind of advertising is massively more effective than a google/facebrick ad.

<comment><USER2> i notice that with a lot of comments about cloud-related services. While effective it's also limited to a few niches

</comment></comment><comment><USER62> How successful companies do ads: ONLY invest in the ad if you have at least 3X ROI to cut out all the "bullshit tiny 1% improvement" ideas, and you don't run into any problems the article mentions.

eBay ran into millions of problems, because they focussed on "how could we improve sales by 0.0001%" and is the ROI of this ad 0.001% or 0.002%?

</comment><comment><USER63> So, there are a lot of reasons to think ads might not work, and a lot of reasons to think surely market forces would punish companies who spend $$ on ads that don't work. Which to believe?

Well, reality check: do the ads you get shown, work? For me, almost never. It's either: 1) the thing I was google searching for anyway, or 2) the thing I bought online yesterday, which I therefore definitely don't want and won't want for a long time. This even happened with things like cars and house air conditioners, where someone who's recently made a purchase is the LEAST likely to want it.

I can think of a lot of reasons for ad-supported companies (which includes news journalists) to want to claim that ads work better than they do. I can think of reasons why executives want to believe ads will save them, when they won't, because actually improving your product is much harder than spending VC money on ads.

</comment><comment><USER64> Where companies have investment, they can afford to place ads that are unprofitable. Though LV (Lifetime Value) can make an unprofitable ad profitable eventually, I question any measure of "effectiveness" other than profitability.

That said, by every measure that we make, Facebook ads for our local events have been profitable for us.

</comment><comment><USER65> I wonder how much (in %) the 'Google tax' is these days, which is paid by businesses that advertise for their brand as keyword on Google despite being the top search result, just because Google sells the almost indistinguishable ad spot above the first result to their competitors.

<comment><USER2> It shouldnt be too hard for websites to teach their users about this: "When searching for us on google, look for our domain name in the results".

</comment></comment><comment><USER66> Somewhere near the very bottom of the article is this gem. Emphasis mine.

"And it wasn't because it was working for them. ... But there was one group of advertisers with a valid reason to purchase own brand name ads. Not that they were any more effective for this group, but because their _competitors were "crowding them out" by buying ads that targeted the brand owner's name (so you search for "Bestbuy" but a sponsored ad for "Walmart" tops the list)_. This can enable Walmart to steal 20% of Bestbuy's organic search traffic"

In other words, even if a lot of people figure out that digital advertising is worthless to increase sales or whatever, they might still buy it for defensive reasons .. It's a win for Google/FB either way

<comment><USER67> This is one of my gripes with Google and not being evil. Allowing competitors to outrank you for your brand if they pay and you don't is racketeering. Allowing this is so blatantly wrong I'm not sure why it doesn't get more attention.

</comment></comment><comment><USER68> I can't read the article but I think it's starting to deflate on its own. Like when J.P. Morgan stopped advertising on google after the whole controversy of ads being shown in front of extremist content and realized it didn't make a difference.

<comment><USER69> you can, just click "maybe later" at the bottom where it says "become a member"

<comment><USER70> I did that, and then afterwords it told me that the article was being gifted to me buy a paying member. After that I just closed the tab. It is kind of a stroke of genius, encouraging me to sign up by showing me that I'm enjoying the largesse of a paying customer. On the other hand, if letting me read the article is such a huge imposition, I guess I don't want it.

<comment><USER71> The paying member is the first author.

</comment></comment></comment></comment><comment><USER72> Is there similar studies about management consulting?

It seems that most of it is just holding CEO's hand when they must flip a coin and having someone outside the company to blame. (they do it with PowerPoint)

</comment><comment><USER73> I just want to say I love the little built in links/dropdowns within the article to expand information. Much more user friendly and smooth than using formal citations.

</comment><comment><USER74> This article was published by The Correspondent, a new media startup funded by members – if you'd like to read more by the journalists you can become a member (pay-what-you- like)[https://thecorrespondent.com/](https://thecorrespondent.com/) | or follow us on Twitter --> @The_Corres, @jessefrederik, @mauritsmartijn

</comment><comment><USER62> "The experiment continued for another eight weeks. What was the effect of pulling the ads? Almost none. For every dollar eBay spent on search advertising, they lost roughly 63 cents , according to Tadelis's calculations." \- that issue isn't related to a problem with digital advertising, but to horrible financial management

</comment><comment><USER75> Some advertising works on me, and might be self-selecting.

The "thing x added to cart" on amazon, showing lots of similar things, and related things. At that point, I have capitulated on many occasions.

It's like giving a coupon for a drink in the pizza waiting area. (Or in some cases, showing me there's a better pizza)

</comment><comment><USER76> If you think about it, the very line that the smartest minds of our generation are working on making people click on things is itself marketing designed by marketers to sell the prestige/status of working for a big advertising company.

That actually is genius in its own way... but just as the quants in finance during the early booms were "the smartest guys in the room, until they weren't and you realised they all were poor implementers of undergraduate statistics and jargon during economic bubble and crash", I don't think the workers for facebook/Google are necessarily that bright.

It's depressing that our economic and social system is geared towards pushing maximum consumption, no argument there, but the smartest people on the planet already self selected out of that over the last 20 years, and what you're left with is... well... marketers and advertising dressed up as prestigious tech firms talking about how great they are.

<comment><USER2> > smartest minds of our generation are working on making

Considering the deterioration in software functionality that i m experiencing the past years across the board (from superheavy web apps to mobile apps that for no reason remove features to desktop apps that function worse than even mobile apps) - i m not even sure they re employing the " smartest minds of our generation"

<comment><USER77> In my experience the smartest people don't want to work on UI's, which is probably the reason they are bad. The smartest go work on other parts of the stack, doing things like machine learning or infrastructure.

The only place where you have the smartest people making UI's are in games, they often have very impressive performance and functionality. But even in games people hate making UI's, it is just that in games people care about the product so they bite the bullet and do it themselves.

Note that I am not saying that UI is easy or unimportant, making UI's is both hard and super important which is why it is a huge problem that we can't find good people for it.

</comment></comment></comment><comment><USER78> Measuring the effects of marketing started a bit earlier than Google: [https://en.m.wikipedia.org/wiki/Scientific_Advertising](https://en.m.wikipedia.org/wiki/Scientific_Advertising)

</comment><comment><USER79> Has anyone ever been fired for buying digital ads? Also, there are enough examples that show that the toxicity or ineffectiveness of a technology becomes immaterial once a sufficient number of jobs (and other vested interests) depend on it.

</comment><comment><USER80> The "experiment" you mentioned here is observational. The reality is, major digital ad platforms today (google, facebook, etc.) all provide rigorous RCT experiments. That will reveal the true effectiveness of ads.

</comment><comment><USER81> Anecdotally, a bubble sounds right, since I know I never see an ad anywhere. Firefox + ublock on both computer and mobile, never even consider a smartphone app if it has ads. So how can it be effective?

</comment><comment><USER82> One thing I don't understand, is why advertisers won't give me a way to tell them that I've already bought a car, so I don't need to see car ads anymore.

</comment><comment><USER83> There was a bus company that started service from Princeton to Philadelphia. They advertised via Facebook. I saw the ad, and I bought a ticket. Sometimes it works.

</comment><comment><USER84> I disagree with the author. Although all points outlined in the article might be independently true, making a general rule out of it is not ok. Especially modern, agile marketing teams that understand the importance of testing and learning are able to produce campaigns that generate positive ROI/ROAS.

Sidenote: Co-founder of Admetrics here. We provide an experimentation solution that enables businesses to run marketing experiments on their data at pace, so we see a lot of test results on a day to day basis.

</comment><comment><USER85> Moral of the story: If you're not testing the null hypothesis when measuring ROI on ads you might not be measuring what you think

</comment><comment><USER86> Just remove the ads and allow the supporters to reward creators anytime, with any amoun.. Like the Pepo app..

</comment><comment><USER87> [https://web.archive.org/web/20191106191434/https://thecorres...](https://web.archive.org/web/20191106191434/https://thecorrespondent.com/100/the- new-dot-com-bubble-is-here-its-called-online-advertising/13228924500-22d5fd24)

</comment><comment><USER88> Tldr: Google is a kid handing out discount pizza coupons in the waiting area of a pizzeria

</comment><comment><USER89> I'm skeptical about one of the main premises of the article: that brand keywords don't have a positive ROI.

Background: I took part in running millions of dollars of brand keywords for multiple companies. This is not what my business sells anymore.

I'll explain my counterargument in two different ways: with an analogy, and with data from a project that I was tasked with figuring out whether branding ads had an ROI. I'm looking for responses that can poke holes and help me have a better understanding.

The analogy. Imagine you own a Chinese restaurant. John Doe is in the mood for Chinese chicken dumplings. John is hungry and in a rush so he gets in his car and starts heading to the local restaurant area because he heard about your restaurant. There are multiple ways to reach your restaurant (same as when you search a brand name in different ways + product A/B/C). No matter which route John takes when he is looking for your restaurant, he will have to go through one of the many roundabouts (the roundabout is the first page of the google search results). John reaches one of the roundabouts that's right before your restaurant. There are 10 exits, some of them lead to your restaurant and some of the lead to other places. Since this is a roundabout, you don't get to see each exit at once, but rather go one by one. Each exit has a sign that states the name of the place and a small description. The information on each sign was put up by the local authority (google), which is based on what the restaurant initial provided but it's relatively the same across all roundabouts that lead to the restaurant. Since John is hungry and in a rush, he tends to take one of the very first exits he comes across (similar concept to the amount of traffic the 1st search result gets VS the 2nd Vs the 3d). The problem is that your restaurant is not the first exit for every roundabout (i.e the 1st result in google). For some roundabouts, the local concierge is the first exit (i.e a number of brands I worked with had the 2nd result for certain brand+product keywords as the 1st result was taken by major informational or review websites). For some roundabouts, the local authority agreed to add a new exit as the 1st one you come across that has a digital sign which changes based on what every "John" is looking for ("yummy chicken dumplings") and leads to the competition (paid search ad that always shows up before the organic results and the title/copy changes based on what someone is searching). For other roundabouts, your restaurant is 1st but John searched for your brand + "product by the wrong name", so the description of the first result doesn't reflect what John is searching for and he skips it (because Google doesn't let you dynamically change the organic title/description as you are allowed with the paid ads).

The data. We stopped google SEM brand ads for 6 months, restarted them and let them run for a few months. We noticed that when we restarted the brand ads, the organic revenue decreased. The organic + brand ads revenue also fell by about 25% VS the time we didn't have brand ads running. The key question was: Did the number of people searching for the brand decrease during the same time? If branded ads are 100% cannibalizing the organic ROI, then the organic search impressions (i.e how many times the brand's links show up when someone searches the brand on google) and clicks should have remained the same. We looked at the top organic brand keywords that were responsible for 99% of the impressions/clicks the brand got on google. During the periods that we checked, organic impressions/clicks had fallen by about 40%. So the number of people searching for the brand fell by about 40% and yet the revenue from the organic search + brand ads only fell by about 25%. If you crunch in the numbers, you'd see that we had about a 20% increase in organic + brand ads revenue VS purely organic revenue.

Last but note least... I don't have the links to the following research with me right now but it's available online: (1) competitors bidding for your brand terms can steal a double-digit percentage of your organic traffic if you don't bid as well, (2) consumers think brands are more legit the more they see their results all over the first page, (3) consumers put significant weight on the first result of the page, (4) the message brands use to get the user to take an action can have a double-digit percentage impact on whether the user will that action or not. Bonus: the high CTRs from the branded keywords help overall google ads account health/quality which helps you get cheaper ads from Google, better positions, etc.

<comment><USER90> Honest question here...

I thought analogies were supposed to be simplified to ease understanding. This one is complex and hard to follow -- is that because the underlying idea is so complex that even the simplified form is complicated?

<comment><USER89> Maybe. It could also be because I did a terrible job at explaining it.

</comment></comment></comment><comment><USER91> Maybe this is just a generational thing, but I still have never clicked on an ad. I hate ads. I don't know anyone who likes them. I don't know anyone who has intentionally clicked on them.

I have literally never met anyone who places any value in advertising at all. Everyone hates it with 100% of their being. It is the garbage we all just sort of accept exposure to as some sort of fee for existing online.

Who are all these people that subverted technology and turned it into advertising-tech?

<comment><USER92> But, you like accessing content for free, correct? That content doesn't exist and then ads are layered on, the context exists BECAUSE of ads. Like, no one would produce the content without the plan to make their money back via ads.

This is how mass media has worked from the get-go. Radio stations were built by advertisers for the purpose of advertising. Entire genres of popular music wouldn't have happened otherwise.

Online advertising did not create the notion of advertising being the predominant media funding model.

And, just because you'd rather ads not exist, it doesn't mean there's something "evil" or whatever about a business promoting itself. I'm going to guess that if you ever find yourself needed to market a business you'll be happy if there's an option to advertise effectively.

<comment><USER76> Your post is literally the content I'm reading that you claim no one would produce without ads, and it's unsupported by ads.

And again (I feel like a broken record on this site), that's a totally inaccurate history of the internet.

Content arrived first, THEN the advertising companies arrived.

<comment><USER93> Hacker News is not mass media. Plus don't forget Y Combinator funded many ad- based platforms. HN isn't free either.

<comment><USER76> A fair point.

So I see two takeaway questions: would we be fine/better off without mass media funded by advertising(it's obvious what my answer to this would be since I don't generally listen to it or watch it, though I acknowledge it going away won't likely happen).

And the second, would content we like to consume/ be worthy of consumption be produced anyway, and my contention is that it would still, just like it did in the past and continues in the current (some free, some paid for), as can be seen in the history of books, early internet, street art, leisure, bloggers, hobbyists, cinema, documentaries, etc.

There might be a third point of mine, which is that we're actually suffering from a glut of content and competition for eyeballs: so to me, worrying about that content disappearing is a bit like worrying about dying of thirst while drowning in a freshwater lake.

<comment><USER93> I don't know, really. I don't want to go back to a time where artists struggle to eat, to make a metaphor. Independent creators are using advertising revenue now too.</comment></comment></comment></comment></comment></comment>